Strategic Planning and Execution: Module 3: Questions To Consider?

Strategic Planning and
Execution: Module 3
Questions to Consider?
• Why is strategy execution so important,

and why do so many organizations
struggle?
• How can we analyze the process to
identify the critical drivers of strategy
execution?
• How do most successful companies
approach the process, and what works
best for them?
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Objectives
You will be able to…

• Evaluate and determine what is
required for strategy execution. No
shortage of things to consider.
• Diagnose the underlying causes for
execution problems.
• Identify the most critical interventions
and practices that drive break-though
performance.
Nissan Motors
Nissan Motors
"Five percent of the

challenge is the
strategy. Ninety-five
percent is the
execution.”
Carlos Ghosn, CEO
Nissan/Renalt
Research Evidence
Research Evidence
• McKinsey: Strong relationship between

execution capability and firm
performance.
Strategic initiatives
70% FAILED due to poor
EXECUTION
John Kotter, HBR, 2012
Research Evidence
• Univ of Chicago: 75% of Sr. Leader time.
• Conference Board: CEO’s #1 issue.
37% Companies that are

GOOD when it
comes to
EXECUTION
HBR Survey 2010
of 1000 Executives
Does your organization
help or hinder execution?
Our organization is
sufficient for achieving
reasonable success 15%
Our organization
62% helps the business
outperform
23%
Creates sustained
Our organization advantage
holds us back
Source: Bain High Performance Organization Database (n=365)
What is execution?
E = f (GSD)
But when you ask them how to get
things done, “the dialogue goes rapidly
downhill.”
Larry Bossidy, CEO of Honeywell
By Becky Wetherington; https://www.flickr.com/photos/macbeck/4199126041
Executive Roundtables
Abbot General Dynamics McGraw‐Hill
Accenture General Electric McKesson
Ally Financial Gilead Moody's
American Express Hewlett Packard Motorola
BAE Systems Hyatt Munich RE
BloominBrands IBM Newell Rubbermaid
Boeing Intel Northern Trust
Broadridge Financial ITW Pfizer
Carter's Kaiser Permanente Safe‐Guard Products
CDW Laureate Sears
Citi LinkedIn SunTrust
Coca‐Cola Lockheed Martin Symantec
Delta Airlines Marriott The Blackstone Group
Equifax Maximus U.S. Army
Ericsson McDonalds Workday
Strategy Execution
• Goes beyond implementing a plan to

include organizational design, culture,
processes, technology, and human
resource management.
• Is an enduring process—not a single
decision or action—and results from a
series of integrated decisions and
actions over time.
• Requires disciplined investment in four
key organizational domains.
The 4A Model
Kinetic Alignment Agility

Energy
Potentia
Ability Architecture
l
Organizatio
Human
n
Resources
Source: Carrig, Snell, Onozuka (2014)
Keep in mind…
• Strategy execution is a key differentiator
of top v. bottom quartile firms.
• The sine qua non of competitive
advantage – most firms struggle.
• Despite its importance, most firms have
difficulty articulating their approach.
• Multidimensional, enduring commitment
and investment
Introduction to Alignment
The 4A Model

Energy
Potentia
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Organizatio
Human
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The 4A Model: Alignment

Energy
Potentia
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Organizatio
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The 4A Model: Alignment
Questions to consider:
• What is it and why is it so
important?
• Why is it so difficult to
achieve?
• What are keys to
successful alignment?
Objectives

• Evaluate different forms of strategic
alignment, and how they are related.
• Determine the risks to alignment and
underlying causes.
• Identify the keys to achieving
alignment in order to execute strategy.
Elements of
Strategic Alignment
• External alignment – organization
operates in a manner ‘fit for purpose’
to support the market strategy
• Internal alignment – processes,
practices, structures work together to
create a mutually reinforcing system
• Leadership alignment – consistency of
perspective and effort toward a
common strategic intent.
Why is alignment
so important?
By Ruben de Rijcke ‐ http://dendmedia.com/vintage/ (Own work)
[CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons
Why is alignment
so important?
“A lot of people saved IBM. Yes, I was the
leader of that team, but I could never
have done it without a group of IBMers
helping me.”
Louis V. Gerstner, Jr.
By Kenneth C. Zirkel (Own work)
[CC BY‐SA 3.0 (http://creativecommons.org/licenses/by‐sa/3.0)], via Wikimedia Commons
Achieving Alignment
Why is alignment
so difficult?
• Complexity – entropy and disintegration.
 Middle mgrs: # priorities hurts execution
• Change velocity and unpredictability -
“No plan survives contact with the
enemy.” (Helmuth von Moltke)
• Coordination and agency –even with the
best of intentions, people operate in
their self interest. Competing demands.
Keys to Achieving
Alignment
• Clearly articulated strategic intent.
 There is NOT one best strategy.
 Treacy & Wiersema
• Shared expectations for high
performance.
 Cultures may reinforce other values.
 Grounded in practice and initiatives.
• Accountability for results.
 Drucker “What gets measured gets done.”
 Caution: unintended consequences.
Example: Strategy Mapping
Q: “Create shareholder value?”
Q: “Create customer value?”
Q: “Internal capability focus?”
Q: “Our people manifest value?”
Adapted from Kaplan & Norton
Example: Strategy Mapping
Metrics Initiatives
•Market value •Intl. growth
•Revenue growth •Migrate high value
•G&A (% sales) •Layoff 80,000
•EBITA •Sell non-core
•Reengineer
•# Customers •Op Bear Hug
•LT customer value •Integrated Solutions
•New Markets •Services
•Customer loyalty •e-Business
•Cost •Reengineer
•Quality •Outsource non-core
•Time (cycle time) •X-functional collab
•Convergence
•Talent capacity •Staffing levels
•Engagement •Culture change
•Performance •Personal Business
•Turnover commitments
•IT expense •Reward (stock)
(% sales) •Data centers
Adapted from Kaplan & Norton
Keys to Achieving
Alignment
• Clearly articulated strategic intent.
 There is NOT one best strategy.
 Treacy & Wiersema
• Shared expectations for high
performance.
 Cultures may reinforce other values.
 Grounded in practice and initiatives.
• Accountability for results.
 Drucker “What gets measured gets done.”
 Caution: unintended consequences.
Keep in mind…
• Alignment is important for consistency

and coordinated action
• It may be the first, and most important,
step in strategy execution
• Alignment is difficult to achieve in
complex and dynamic organizations.
• Clarity, shared expectations, and
accountability are key.
Introduction to Ability
The 4A Model: Ability

Energy
Potentia
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Organizatio
Human
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Resources

Energy
Potentia
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Organizatio
Human
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Resources
• Are people the most
important asset?
• Why do firms face talent
shortages?
• What does best practice
look like?
Objectives

• Identify the pitfalls firms make
resulting in a recurring “talent
syndrome.”
• Assess where the key talent pools exist
to execute strategy.
• Evaluate the current talent system in
terms of its functionality and vitality.
The Talent
Syndrome
Pattern of symptoms occurring together…
1. Chronically short of talent.
2. Sr. executives spend preponderance
of time reacting to people issues.
3. Not a “top 3” strategic investment
(first expense to be cut).
4. Unable to execute growth strategies.
By Scott Maxwell
https://www.flickr.com/photos/lumaxart/2365567884/
Can you guess who?

• World’s Most Admired Companies (Fortune)
• Most Innovative Companies (Fast Company)
• World’s Most Respected Companies (Barron’s)
• World’s Most Valuable Brands (Forbes)
• Top Companies for Leaders (Aon Hewitt)

• Best Companies for Leadership (Hay Group)
• Smartest Companies in the World (MIT Review)
• World’s Most In Demand Employers (LinkedIn)
• World’s Most Ethical Companies (Ethisphere)
• Best for Working Mothers (Working Mother)
• Top 50 Employers for Women (The Times)
• 100/100 (Corporate Equality Index)
General Electric
• Conglomerate
(unrelated diversification)
 300,000+ employees
 170+ countries
• Requirements for Strategy Execution

 General managers
 Cultural integration
• Talent Management
 Investment in leadership bench
 Total system = hire, develop, rotation,
coach/fb, succession, career, rewards, etc.
• “The Academy”
By Jeff Turner
https://www.flickr.com/photos/respres/8298496573
Investing in Talent
What does it take?
“If I need more engineers to execute my

strategy, I’ll go hire more engineers to
execute my strategy.”
Sr. Manager, Union Carbide
What does it take?
“We need to think of talent management,

not as filling jobs, but as creating the
strategic capability for tomorrow.”
John Hofmeister, Royal Dutch Shell
What does it take?
“A good hockey player skates to where

the puck is. A great hockey player skates
to where the puck is going to be.”
Wayne Gretzky
Keys to Execution Ability
• Identify strategic talent pools

• Develop a robust talent system
• Vitality – build the talent pipeline
Identify Strategic
Talent Pools

Develop a Robust Talent System
Retention Sourcing
- turnover - recruitment
- dismissal - staffing
Engagement
- attitudes Assimilation
- behavior - on boarding
- culture (values)
1 2 3 4 5
Rewards Development
- pay - assignment (70%)
- recognition - coaching/feedback (20%)
- training (10%)
Perf. Mgmt. Career Management

- goal setting - succession
- evaluation - path planning
- feedback
Adapted from Ready and Conger
Develop a Robust Talent System
Functionality
• Are the processes useful and usable?
• Is the system mutually reinforcing?
• Does it produce “A” players in “A”
positions? (Caution: Results vs.
behavior/values)

Vitality: Build
Talent Pipeline
• Commitment
• Engagement Top
Leaders
• Accountability
Business
Perf.
Line Key
Managers Talent
Without vitality, firms
disconnect talent from
strategy execution.
Adapted from Ready and Conger
Keep in mind…
• Avoid the talent syndrome. Assets

require investment over time.
Execution is a capability, not a one-
time event.
• Identify strategic talent pools. One size
does NOT fit all.
• Talent management is a total system.
• Building the pipeline is the
responsibility of leaders.
Introduction to
Architecture
The 4A Model: Architecture
Energy
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Energy
Potentia
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Organizatio
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• What are the key
components of
organizational architecture,
and which matter most?
• Why does structure help
some firms and hold back
others?
• What key design principles
help firms execute their
strategy?
Objectives

• Identify and evaluate the components
of organizational architecture and how
they work together.
• Assess how strategic complexity and
change influence the appropriate
design of organizations.
• Determine how design elements will
help increase execution capability.
Organization Architecture:
Managing information and authority
Form …structure
follows Structure & follows
function… Organization strategy.
Processes & Systems &
Workflow Performance Technology
People &
Rewards
Adapted from KPMG
Domino’s recipe
for success?
“Nobody thought you could make money
on delivery. Most places just delivered to
get some volume before they could
afford to cut out the delivery… It was a
challenge. I just had to figure out how…
and it was the best thing I've done.
Tom Monahan,
Founder, Dominos
• Not a better pizza, but
a better organization.
By Apatzi (Own work) [CC BY‐SA 3.0 (http://creativecommons.org/licenses/by‐sa/3.0) or GFDL
(http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons
How Architecture Drives Performance
Why does architecture help

some firms and not others?
Two extremes…
• Underdeveloped organization - unable
to execute because of confusion,
waste, and lack of coordination.
• Bureaucratic organization - slow, rigid,
siloed, myopic, and unresponsive.
• Neither can execute well.
Design Principles
• Strategy “enacts” environment 

(complexity + dynamism = uncertainty)
• Structure helps manage uncertainty
and information required to make
decisions.
• Curvilinear relationship between
uncertainty and value of bureaucracy.
Uncertainty
and Bureaucracy
Bureaucratic Solution
A B C
Uncertainty = f (complexity, change)
Uncertainty
and Bureaucracy
Reduce
Info Processing
Requirements
• Centralization
• Specialization
• Standardization
• Formalization a
A B C
Uncertainty
and Bureaucracy
Reduce Increase
Info Processing Info Processing
Requirements Capability
• Centralization • Decentralization
• Specialization • Lateral relations
• Standardization • Flexible processes
• Formalization a • Info. systems
A B C
Architecture Best Practices
Execution Architecture
• Flatter, simplified structures

 Decisions close to action
• Streamlined processes & workflow
 Eliminate waste & improve value add
• Information access
and connectivity
Structure &
Organization
 “Inform” real
time decisions
People &
Rewards
From Google to Alphabet
CEO
Google Calico Nest Fiber Google[x]
Why change structure?

• Too big and complex
• Consensus is too slow (not agile)
• Lack of transparency or visibility
• International inconsistency (culture)
• Duplication of effort, poor execution
From Google to Alphabet
CEO
Google Calico Nest Fiber Google[x]
Why change structure?
“We can make it cleaner and more

accountable… improve transparency and
oversight of what we’re doing.”
Larry Page, CEO
Execution Architecture
• Flatter, simplified structures

 Decisions close to action
• Streamlined processes & workflow
 Eliminate waste & improve value add
• Information access
and connectivity
Structure &
Organization
 “Inform” real
time decisions
People &
Rewards
Keep in mind…
• Architecture can be both a help and a

hindrance to strategy execution. Its
effect is rarely neutral.
• Most elements of organization design
are meant to address uncertainty and
improve information processing.
• Strategy execution depends on
improving clarity, simplicity, focus, and
flow.
Introduction to Agility
The 4A Model: Agility

Energy
Potentia
l
Organizatio
Human
n
Resources

Energy
Potentia
l
Organizatio
Human
n
Resources
• Why is agility critical for
execution?
• Why is it so difficult to
achieve?
• How can firms increase
agility?
Objectives

• Determine the obstacles to agility and
underlying causes.
• Identify the requirements for improving
organizational agility.
• Analyze and evaluate which specific
actions will help to improve agile
execution.
The More Things Change

Albert Einstein gave his
assistant an exam to
distribute to his graduate
students.
"But Professor Einstein,” she
said, “these are the same
questions from last year.”
"It's all right," replied
Einstein, "the questions are
the same…
…but the answers are
different.“
Nokia
“A few years ago, you would have set

your vision and strategy and then start
following it. That does not work any
more. Now you have to be alert every
day, week, and month to renew your
strategy.”
Pekka Ala-Pietilä,
former President of
Nokia
By Jorge Barrios (Own work) [Public domain], via Wikimedia Commons
Apple (and Google)

• Focus on customer
• Extend the core - new roducts/services
• Missteps along the way... adapt.
Agility through Organization Learning
Why is agility so difficult?
• Uncertainty and ambiguity – what

makes it difficult, makes it important.
• Inertia versus momentum – flat footed
or sprinting.
• Leader adaptability – too slow or too
fast.
• Culture of risk aversion – avoid falling
into the execution trap.
Keys to Agile Execution
• Organizational learning
• Leadership unity
• Resource fluidity
Adapted from Doz and Kosonen
Agility: Organizational
Learning
EXTERNAL
Open to the
Outside
PRESENT
FUTURE
Own & Solve Experiment

Problems Continuously
Share Info.
Internally
INTERNAL
Adapted from Leonard Barton
Learning
EXTERNAL
• Network broadly
• Explore and exploit
Open to the
Outside
PRESENT
FUTURE
Share Info.
Internally
INTERNAL
Learning
EXTERNAL
Open to the
Outside
PRESENT
FUTURE

Share Info. • Self disrupt

Internally • Fail fast, fail small
INTERNAL
Learning
EXTERNAL
Open to the
Outside
PRESENT
FUTURE
Share Info.
• Real time Internally
collaboration tools
• Disciplined reflection
INTERNAL
Learning
EXTERNAL
• Data driven Open to the

• Lead from middle Outside
PRESENT
FUTURE

Share Info.
Internally
INTERNAL
Agility through Unity and Fluidity
Agility: Leadership “Unity”
• Unpredictability – diagnose, decisiveness

• Distributed knowledge - transactive memory
• Conflicting views - vigorous debate
• Highly dynamic - fast feedback and learning
• Focus on patient - strong team identity
By Official Navy Page from United States of America KRISTOPHER RADDER/U.S. Navy (Doctors
perform surgery together.) [Public domain], via Wikimedia Commons
Agility: Resource Fluidity
• Unrelenting focus on customer

• Continuous improvement to strengthen
the core (readiness)
• Resource flexibility
• Allocation flexibility
Keys to Agile Execution
• Organizational learning
• Leadership unity
• Resource fluidity
Adapted from Doz and Kosonen
Keep in mind…
• Strategy execution is not just sticking to
the plan.
• Agility is both responding to and creating
change more rapidly than competitors.
Focus on customers.
• It’s very difficult to be agile from a
standing start – organizational learning.
• Agility is the reconciling opposites –
stability/change, present/future,
efficiency/innovation.
Module Lessons
The 4A Model
Energy
Potentia
l
Organizatio
Human
n
Resources

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Strategic Planning and

• Why is strategy execution so important,

You will be able to…

"Five percent of the

• McKinsey: Strong relationship between

37% Companies that are

• Goes beyond implementing a plan to

Kinetic Alignment Agility

Kinetic Alignment Agility

Kinetic Alignment Agility

The 4A Model: Alignment

You will be able to…

Example: Strategy Mapping

Q: “Create shareholder value?”

Q: “Create customer value?”

Q: “Internal capability focus?”

Q: “Our people manifest value?”

• Alignment is important for consistency

Kinetic Alignment Agility

The 4A Model: Ability

Kinetic Alignment Agility

You will be able to…

Can you guess who?

• Top Companies for Leaders (Aon Hewitt)

• Requirements for Strategy Execution

“If I need more engineers to execute my

What does it take?

“We need to think of talent management,

“A good hockey player skates to where

Keys to Execution Ability

• Identify strategic talent pools

Keys to Execution Ability

• Identify strategic talent pools

Perf. Mgmt. Career Management

Develop a Robust Talent System

• Identify strategic talent pools

• Avoid the talent syndrome. Assets

Kinetic Alignment Agility

The 4A Model: Architecture

Kinetic Alignment Agility

You will be able to…

Why does architecture help

• Neither can execute well.

• Strategy “enacts” environment 

• Flatter, simplified structures

Google Calico Nest Fiber Google[x]

Why change structure?

From Google to Alphabet

Google Calico Nest Fiber Google[x]

Why change structure?

“We can make it cleaner and more

• Flatter, simplified structures

• Architecture can be both a help and a

The 4A Model: Agility

Kinetic Alignment Agility

Kinetic Alignment Agility

The 4A Model: Agility